Another one bites the dust.....

[Tina2001aniT]

http://money.cnn.com/2007/07/31/news/companies/american_home.reut/index.htm?postversion=2007073117


I swear they are falling like flies.....Kinda scary.

 

[vraiblonde]

The large U.S. mortgage provider and real estate investment trust said its lenders cut off access to credit, leaving it without cash on Monday to fund $300 million of loans it had agreed to make.

Now I'm curious why that happened because note the plural - lenders.

Here's what Forbes has to say:
http://www.forbes.com/markets/2007/07/31/ahm-subprime-closer-markets-equity-cx_ra_0731markets36.html

American Home Mortgage is a real estate investment trust that makes mortgages and bundles them into securities. Although it does not deal directly in subprime mortgages, the value of its better-quality assets suffered in the recent market rerating of risks that began with defaults on home loans to uncreditworthy borrowers made during the housing boom at abruptly ended early this year.

It's kind of like the dotcom boom that made people go from rags to riches and back to rags again.

 

[Tina2001aniT]

Now I'm curious why that happened because note the plural - lenders.

Here's what Forbes has to say:
http://www.forbes.com/markets/2007/07/31/ahm-subprime-closer-markets-equity-cx_ra_0731markets36.html



It's kind of like the dotcom boom that made people go from rags to riches and back to rags again.

I know that about a year ot so ago they were doing alot of the negative amoritization loans, lending up to 120%, I feel quite confident that ALOT of those loans went into foreclosure. They were lending 120% thinking values were going to keep increasing and they did not. So now these homeowners have loans higher than the value of the house and can't even refi out of it to save their butts. :shrug: I guess thats what happens when you get greedy. Granted the negative am loans were great for investors and such, but just for the regular joe blo who saw it as a way to get more house for smaller payments it was a disaster waiting to happen.

 

[vraiblonde]

I know that about a year ot so ago they were doing alot of the negative amoritization loans, lending up to 120%, I feel quite confident that ALOT of those loans went into foreclosure.

Not to mention the new fad of "interest-only" loans that screwed people out of their equity.

So it goes both ways: the homeowner was stupid and is now screwed, and the mortgage lender was greedy and is now screwed as well.

 

[Hawkeyewife]

Those of us with sizeable downpayments and good credit are just waiting for the right time to gobble up a deal. Interest rates aren't going up significantly, at least for the next year or so.

I think this correction is great, just what the market needs. Same thing happened to tech stocks, the strong survived and are now thriving. Same thing will happen with the credit fall out and subsequent housing bust. Horray for basic economics!

 

[Lugnut]

Those of us with sizeable downpayments and good credit are just waiting for the right time to gobble up a deal.

Why are you waiting? House sales have slowed yes, but values are not dropping. Interest rate are rising though...

 

[vraiblonde]

but values are not dropping.

Values are dropping like a lead weight. I bought my house just 4 months ago, and right now you can buy significantly more house for the money I paid.

 

[awpitt]

Now I'm curious why that happened because note the plural - lenders.

It says lenders because companies like American Home initiate and service loans. The actual underwriting (funding) of loan is done by banks. The "lenders" mentioned here are the banks that fund the loan initiated by American Home and companies like them.

 

[vraiblonde]

It says lenders because companies like American Home initiate and service loans. The actual underwriting (funding) of loan is done by banks. The "lenders" mentioned here are the banks that fund the loan initiated by American Home and companies like them.

I know that, but my questions is why did multiple banks that they deal with cut them off? And are they cutting off ALL mortgage brokers, or just American Home?

Because one bank dropping them would mean the bank was in trouble. Multiple banks dropping them means the problem is them.

 

[awpitt]

I know that, but my questions is why did multiple banks that they deal with cut them off? And are they cutting off ALL mortgage brokers, or just American Home?

Because one bank dropping them would mean the bank was in trouble. Multiple banks dropping them means the problem is them.

The impression I got was that the banks are cutting off American Home.

 

[pixiegirl]

I know that, but my questions is why did multiple banks that they deal with cut them off? And are they cutting off ALL mortgage brokers, or just American Home?

Because one bank dropping them would mean the bank was in trouble. Multiple banks dropping them means the problem is them.

I agree. My house in CRE appraised a little over a year ago for 30K over what it's on the market for now. When we sold our house in Mechanicsville just two years ago, we were concerned that the house wouldn't appraise for the asking price; luckily for us it did and we made a nice profit. I guarantee that today that house would NEVER sell for what we sold it for when the market was hot.

 

[Lugnut]

Values are dropping like a lead weight. I bought my house just 4 months ago, and right now you can buy significantly more house for the money I paid.

I had my town house appraised at the end of last year. In May I received a COLD offer to purchase my TH for $21K higher than the appraisal from Nov-06.

I also have a house on a couple acres just south of Leonardtown. Comparable (size/age/acreage) houses have sold in the leonardtown area in the last 4 months for expected prices. I had it appraised 4 years ago and again at the same time my TH was appraised. ignificant increase in appraised value. Of course something is only worth what somebody else is willing to pay for it. :shrug:

According to MRIS stats for June of this year and last...

_____________________________ 07__________06_______Change
Total Sold Dollar Volume:____$41,510,574__ $44,766,208___-7.27 %
Average Sold Price:________$367,350____$339,138_______+8.32 %
Median Sold Price:_________$345,000____$335,000_______+2.99 %
Total Units Sold: __________113 ______132_____________-14.39 %
Average Days on Market: 97___________39___________+148.72 %
Average List Price for Solds: $385,186 $346,975__________+11.01 %

As you can see. On average, value has INCREASED while sales have slowed.

You may want to have your house appraised again. You're likely in a better situation than you thought.

 

[Chasey_Lane]

I check homesdatabase.com weekly and I've noticed as much as a $80K drop in listing prices. Homeowners are wanting to cash out thinking they'll get for their house now what they could have 3-4 years ago when the real estate market was crazy!

Has anyone else noticed that Leonardtown Farms (Marrick Homes) keeps going up and down with their home prices?

 

[vraiblonde]

The impression I got was that the banks are cutting off American Home.

That's the impression I got, too, which is why I reasoned that it must be a problem with American Home, not necessarily brokerages in general.

 

[vraiblonde]

I check homesdatabase.com weekly and I've noticed as much as a $80K drop in listing prices.

Obviously it's a buyer's market right now. Which is why, Lugnut, appraised value doesn't mean anything. Shoot, we got our house in Middletown appraised at over $500k but nobody's going to pay that for it.

My house right now does indeed appraise for more than I paid, but why would someone buy my house at the appraised value when there's a much better house right around the corner from me that's selling for $60k less?

 

[Lugnut]

Obviously it's a buyer's market right now. Which is why, Lugnut, appraised value doesn't mean anything. Shoot, we got our house in Middletown appraised at over $500k but nobody's going to pay that for it.

My house right now does indeed appraise for more than I paid, but why would someone buy my house at the appraised value when there's a much better house right around the corner from me that's selling for $60k less?

Search me...

One of my properties is on track for what I would expect. On the other, I'm receiving unsolicited offers to purchase it for considerably more than what it APPRAISED for 6 months ago.

:shrug:

 

[vraiblonde]

On the other, I'm receiving unsolicited offers to purchase it for considerably more than what it APPRAISED for 6 months ago.

You are in the distinct minority.

 

[Lugnut]

Obviously it's a buyer's market right now. Which is why, Lugnut, appraised value doesn't mean anything. Shoot, we got our house in Middletown appraised at over $500k but nobody's going to pay that for it.

My house right now does indeed appraise for more than I paid, but why would someone buy my house at the appraised value when there's a much better house right around the corner from me that's selling for $60k less?

Another point, The numbers I posted above are ACTUAL numbers for sales in St. Marys county for June of 07 and June of 06. True they show a decrease in number of homes sold and an increase in number of days on the market. But they also show an INCREASE of more than 8% in the average sales price in a single year. I stand by my original statement. Home sales have slowed, but values are not dropping. Er, at least not in St. Marys county...

The appraisals of my own properties were simply an example.

 

[Chasey_Lane]

You are in the distinct minority.

My aunt just recently sold her home in La Plata (settlement was Monday). She had an offer w/in hours of it going on MLS, which was OVER her asking price! Someone really wanted her home and didn't want a bidding war going on!!

 

[vraiblonde]

My aunt just recently sold her home in La Plata (settlement was Monday). She had an offer w/in hours of it going on MLS, which was OVER her asking price! Someone really wanted her home and didn't want a bidding war going on!!

I wonder why all these agents are crying the blues, then?

We need to get Christy in here to give us the scoop.